This biennial report reviews the quality of the quarterly euro area and national financial accounts. It fulfils the formal requirement for the Executive Board of the European Central Bank (ECB) to inform the Governing Council of the ECB on the quality of those statistics, as set out in Article...

This paper investigates the phenomenon of financial fragmentation within the euro area and focuses on its implications for bond market stability. A three-step approach is used to assess the sensitivity of credit risk premiums to identified global risk shocks, distinguishing between regimes of...

Despite recurring shocks, Europe’s economy remains resilient with record-low unemployment, declining inflation, and a stable financial system. However, policymakers face mounting challenges, including trade tensions, rising demand for defense spending, and the need to ensure energy security,...

The euro area financial system had proven resilient through multiple shocks, supported by significant bank capital and liquidity buffers. While nonbank financial intermediation (NBFI) has expanded rapidly, diversifying the financial landscape, renewed efforts to create deeper and more integrated...

Banking supervision has significantly strengthened since the last Financial Stability Assessment Program (FSAP). The European Central Bank (ECB), in cooperation with the national competent authorities (NCAs), is exclusively responsible for the prudential supervision of credit institutions...

The European Union (EU) recently sought to give fresh impetus to longstanding efforts to grow and deepen its capital markets—the Capital Markets Union (CMU). Building on the earlier Financial Services Action Plan and work to remove barriers to consolidation and efficiency in post-trade...

The FSAP reviewed the supervision and oversight of cyber risk and operational resilience of Significant Banking Institutions (SIs) in the Single Supervisory Mechanism (SSM) and the Financial Market Infrastructures (FMIs) operated by the Eurosystem. From an institutional perspective, the review...